Debtors collection period - formula, Finance Basics

Assignment Help:

Debtors Collection Period - Formula

Fomula is given below:

Debtors collection period = 365/ Debtors turnover

Or (365 x Average debtors)/ Annual credit sales

This refers to credit duration that was granted to the debtors on the duration within that they were imaginary to pay their dues to the firm.

The shorter the collection period/credit duration the higher the debtors turnover and vice versa. If no opening debtors are provided requires the closing debtors to represent average debtors.


Related Discussions:- Debtors collection period - formula

Som120 project, Frequency distribution for amount charged with starting poi...

Frequency distribution for amount charged with starting point 1800, class width 1000. For income use starting point 20 and class width of 10.

Constraints of venture capital in us, Constraints of Venture Capital in US ...

Constraints of Venture Capital in US 1. Require of rich investors in US, thus inadequate equity capital. 2. Inefficiencies of stock market - NSE is investors and inefficien

What do you mean listing of securities, What do you mean listing of securit...

What do you mean listing of securities? Explain. Listing of Securities: Listing means admission of the securities to dealings on a recognized stock exchange. Securities of an

Calculate the volume of sales to earn profit, From the following informatio...

From the following information related to XYZ Ltd.; you are required to find out (a) contribution (b) Break-even point in units (c) Margin of safety, (d) Profit             Tota

Management of account receivable, Management of Account Receivable In ...

Management of Account Receivable In order to keep current customers and attract new ones, most firms find it necessary to offer credit. Accounts receivable represents the exte

Discounts and credit terms, Discounts and Credit Terms Credit Terms ...

Discounts and Credit Terms Credit Terms Credit terms involve both the length of the credit time and the discount specified.  The terms 2/10, n/30 means that a 2 percent d

Example of earnings yield valuation, Example of Earnings Yield Valuation ...

Example of Earnings Yield Valuation Estimated maintainable earnings are £240,000 per annum; rate of return required is 25 percent. Calculate the value of the business. V

Pending Solutions, How long until I get the results of my order

How long until I get the results of my order

Basel committee on banking supervision, Question 1: ‘The Basel II frame...

Question 1: ‘The Basel II framework provides a range of options for determining the capital requirements for, inter-alia, credit risk and operational risk to allow banks and s

Materials management - supply chain management, Materials Management - Supp...

Materials Management - Supply Chain Management Materials management was once a task undertaken without the assistance of computers. Today it is unthinkable as the speed of cal

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd